Africa Downunder, Graphite headed for 500% price lift in next 20 years
With construction now under way on one of only two graphite projects currently under development by listed companies in the world, Walkabout Resources (ASX: WTU) had the vision back in 2015 to commit, as an early mover, to de-risking the Lindi Jumbo graphite project in Tanzania, and it is about to reap the benefit of that move with first production forecast for the first half of 2023.
“We took this decision years ago, we said let’s not just talk about this, let’s develop this thing. It is de-risked with all approvals in place, construction is underway, and it’s got outstanding low capex, low opex and huge growth potential both upstream and downstream,” Walkabout Resources managing director Andrew Cunningham told the final day of the Africa Downunder conference in Perth.
The Lindi Jumbo project is unique, being a long life, high margin graphite deposit. It is the highest margin graphite project currently under development in the world and has a long mine life of 24 years, with plenty of exploration upside potential.
“The differentiating factor of this project is the resource. The entire project is driven by the uniqueness of this resource. It’s high grade and most of the flakes in the ground are above 300 microns, so we quickly decided when we saw this that we had to come up with a solution to preserve as much of these flakes as possible into the concentrate,” Mr Cunningham said.
“This is not only a battery story, our story is large flake graphite. Although about a quarter of our product will be suitable for the battery market, being minus 150 microns.”
Not only is Walkabout actively progressing towards its long-term objective of achieving production from Lindi Jumbo, but the company will also benefit from delivering the project in a very bullish market for graphite globally.
Walkabout has a mining sales agreement for 100 per cent of its product produced in Tanzania in place with Hong Kong-based Wogen Pacific for a minimum of five years, which is renewable.
“The graphite market has been fairly strong over the past couple of years, mainly driven by the EV market. There has been a 30 per cent up-tick in graphite prices, driven mainly by the finer flake, but it is forecast to grow by more than 500 per cent in the next 20 years,” Mr Cunningham said.
“The time to get into graphite is now, our timing is right being under construction, and already there is a supply deficit predicted for this year and next.”
It’s not all about economics for Mr Cunningham and Walkabout, he and his fellow directors over the company’s journey in Tanzania have held to their commitment to be best-in-country when it comes to engagement with local communities and government.
“We are a well-known citizen in the country, last year we won the AAMEG award for our social programs on site. The Prime Minister has been to site and said, ‘this is the way he wants all companies to operate in Tanzania’,” Mr Cunningham said.
He said that statement was a reflection on the way Walkabout had put memorandums of understand in place with local communities from day one, with the three local villages impacted by the project benefitting from a 5 per cent profit share in the Lindi Jumbo project going forward, held by a collective Village Trust.
Walkabout Resources managing director Andrew Cunningham